A mortgage or loan applicant typically is required to provide to a prospective lender documentation showing the applicant's sources of funds and amount of income. The lender requires the documentation so that the lender can evaluate the risk that the applicant will not pay back the loan. The lender usually requires evidence showing that the applicant has sufficient income and evidence showing the degree to which the applicant is already in debt.
The applicant's income and debt information may be verified using third party information. If there are deficiencies in the applicant's information, the deficiencies may be made up by the third party information.
There are several methods for obtaining the third party information. The different methods provide different types of information. For example, credit bureaus provide information on the applicant's historical credit payments, but do not provide any information about income. Other services provide information regarding the applicant's income, but do not provide any information about credit history. Such services include those available under the trademarks TALX® and 1SourceData® and ID Check Direct.
There are ways to statistically estimate the applicant's annual gross income from credit bureau data and loan application data. These estimates are subject to various errors that could reduce the accuracy of risk evaluation based upon such estimates.
In some instances, the lender may require the applicant to state his income and major recurring expenses and then support his statements with documentation such as pay-stubs, W-2 forms, loan documents and credit card statements.
Providing or procuring documentation to support a credit application can be costly, require effort and can extend the lending process. For example, when the applicant provides documentation to support the applicant's application, the applicant typically must search his files for one or more W-2 forms, pay stubs, credit documents and invoices. When supporting information is ordered by the lender, the lender typically must request the information from one or more vendors and pay one or more services fee.
It would be desirable, therefore, to provide apparatus and methods for reducing the cost, effort and/or time involved in gathering information to support a loan application.